Selected Payout Products of the Old-Age Pension Saving Scheme

Description

This book discusses the payout phase of the old-age pension saving scheme, the so-called effective premium, and offers detailed actuarial models and analyses of five old-age pension saving products used in practice. These include the basic permanent monthly annuity, without any benefits for survivors, as well as products which, in addition, also include benefits for survivors or authorized persons in the event of the pensioner’s death. The purpose of the book is to point out the method of determining future old-age pensions from old-age pension savings, and to present the advantages and disadvantages of such a pension. The book also emphasizes the role of the profitability testing of the products and answers questions concerning the effectiveness of old-age pension savings and insurance. The book is primarily intended for students of actuarial and financial mathematics and future economists. Preface Acknowledgements Contents Part I Introduction and Preliminaries 1 Preliminaries 1.1 Basic Probabilities 1.2 Yield Curves 1.3 Administrative and Collection Costs References 2 Model of Longevity 2.1 Model of Adult Age Longevity 2.2 Lee-Carter Model Implementation 2.3 Old-Age Longevity 2.4 Implementation of Kannistö's Model 2.5 Selection Factor References Part II Selected Payout Products 3 Selected Life Old-Age Pension Products 3.1 Selected Products 3.2 Basic Notations 3.3 Product 1 3.4 Product 2 3.5 Product 3 3.6 Product 4 3.7 Product 5 References 4 Analysis of the Products 4.1 Loading Assessment 4.1.1 Calculation of Loading Components 4.1.2 Effective Premium 4.1.3 Monthly Pension with Respect to the Retirement Age 4.2 Notes on Product 3 References 5 Test of Profitability 5.1 Test of Profitability Basis 5.2 Test of Profitability Process 5.2.1 Profitability Measures 5.3 Profitability Measures of Product 1 5.3.1 Sensitivity of Input Parameters Reference Part III Conclusions and Recommendations 6 Research Questions and Hypotheses 6.1 Research Questions 6.2 Research Hypotheses 6.3 Discussion About the Attitude to Risk and Overall Long-Term Savings References A Life Tables B Procedure for Determining of the Effective Premium of Product 1 C Forward Rate for Continuous Compounding Index